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description

The hotel industry has experienced tremendous growth since the 1980s and has emerged as a global industry. During the expansion processess and rise of competition, multinational, multi-brand corporations, such as Hilton Hotels Corporation, were in the process of finding new markets and setting priorities. On the other hand in emerging markets, such as Russia, most of the national hotel industry had been formed under the pressure of foreign hotel chains. In addition to competing with foreign firms in their own markets, local Russian companines were also planning to enter international markets. In this environment where competition was strengthening within the global hotel industry, and new players were emerging, a number of questions and challenges existed: 1) How could firms effectively leverage their competencies and increase their competitiveness? 2) Would the multinational hotel corporations continue to expand their brand portfolios? 3) How could hotel chains maintain their integrity during the expansion on a global scale? 4) What strategies might apply to convince Western hotel companies to compete in emerging markets? 5) Which direction would further develop the hotel industries in emerging economies.

learning objective:

This case is suitable for use in an early section of a strategic management course, which introduces the students to the topic of industry analysis. Porter's Five Forces Model can be applied using the information provided. The industry analysis will enable students to recognize the dynamic and variable forces affecting the industry and evaluate the industry's attractiveness. The central theme of the section is understanding how and why different industry structures offer varying opportunities for firms to achieve competitive advantage. The emerging character of the Russian business environment and the global nature of the industry add a degree of complexity to the case suitable for an international management course.